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Home My WebLink AboutPalm+Desert+Measure+G+OverviewPalm Desert Measure G 2024 1 SantaBarbaraCA.gov What is our City’s Budget? 2 The City’s overall budget includes many governmental funds, including the General Fund. Most of these funds are restricted for specific purposes. The General Fund is the City’s primary fund for operations and has this year had projected revenues of $83.2 million and requested expenditures of $82.9 million. This budget relies on an estimated $16.3 million in reserves to support estimated costs. Revenues increased by approximately $7.6 million (10%) over the prior year, but expenses also rose by 10%, partially due to nearly $6 million in clean-up costs from Tropical Storm Hilary, a retroactive increase to policing services imposed by the County Sheriff, and other factors. 3 Wind and Storm Damage Initial Estimates of $5,508,000 in Clean Up Costs for August 2023 Weather Events SantaBarbaraCA.gov How City Revenues Are Invested 4 Overall, spending on public safety accounts for roughly 35% of overall General Fund expenditures. In Palm Desert, the largest sources of revenue for the General Fund are roughly; ●35% by Sales Tax, ●28% by Hotel (TOT) taxes ●12% by Property Tax ●25% Other Revenues How is the City funded? 5 Sales Taxes, 35.2% TOT (Hotel) Tax, 27.8% Property Tax, 11.6% Franchises, 4.2% Licenses/Fees/ Permits 6.1% All Other, 15.1% 70% of the City’s Sales Tax revenue is generated by non-residents SantaBabaraCA.gov What is the City’s fiscal outlook? While the financial outlook of the City is sound for the upcoming fiscal year,there are several trends that could adversely impact the City’s finances in subsequent years and will require prudent decision-making to maintain the current service levels. ●In terms of revenues,the level of revenue growth experienced in recent years is not likely to continue,as increases were largely fueled by the one-time federal stimulus funding and business-friendly fiscal policies during and post pandemic. ●The City’s expenditures are projected to increase at a faster rate than the revenue growth in coming years.Projections indicate a deficit of as much as $14 million within five years,driven in large part by rising public safety costs. 6 7 Rising costs for Public Safety and Emergency Medical Response are already impacting the City’s budget, and the City is growing in terms of both residents and required services. With the dissolution of redevelopment agencies in California, the City continues to defer maintenance, in addition to the operating costs of the new Fire Station. Limited resources and increasing operating costs will present challenges in the City’s ability to maintain services. To maintain the City’s long-term finances, staff has begun developing strategies to identify on-going efficiencies, cost savings and potentially new revenue options. Fiscal Challenges 8 Deficit Spending based on Current Projections STATUS QUO - ALL IN FY 2023-24** FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Estimated Revenue 83,446,318$ 80,822,877$ 83,974,969$ 88,173,718$ 92,582,404$ Increase to Property Tax (W/D from Cty Library)-$ 2,400,000$ 2,493,600$ 2,618,280$ 2,749,194$ Estimated Expenditures 81,924,312$ 79,982,492$ 85,581,266$ 91,571,955$ 97,981,992$ Increase Tfer Out for Fire MOU (72-66-56 Hrs)-$ 400,000$ 1,234,363$ 1,320,768$ 1,413,222$ Increase to Ops Expenditures for Library 1,321,527$ 2,579,520$ 2,760,086$ 2,953,292$ 3,160,023$ Increase Tfer Out for Station 102 Staffing -$ -$ 6,637,036$ 7,101,629$ 7,598,743$ Increase to Ops Exp for Addtl Patrol/NS PW/ERP 830,000$ 1,990,200$ 2,129,514$ 2,278,580$ Revenue over (under) expenditures 200,479$ (569,135)$ (11,734,383)$ (14,285,161)$ (17,100,962)$ Est. General Fund Balance 1 120,916,512$ 102,251,178$ 76,047,863$ 49,313,480$ 14,028,320$ Unfunded Requests (from Reserve)(18,865,813) (25,634,180) (15,000,000) (21,000,000) (15,000,000) New Library ($30M)(800,000) (3,200,000) (16,000,000) (10,000,000) North Sphere Community Park ($15M) BONDS (5,150,000) (10,000,000) North Sphere Regional Park ($30M) (15,000,000) (15,000,000) August 2023 Weather Event - Channel Projects (8,208,000) (5,000,000) (5,000,000) Additional One-Time Appropriations for 2024-25*(15,484,180) Est. General Fund Balance 102,251,178$ 76,047,863$ 49,313,480$ 14,028,320$ (18,072,642)$ SantaBabaraCA.gov What is the City’s fiscal outlook? 9 Projected Revenues/Expenditures 10 Measure G: The Palm Desert Public Safety, Roads, City Services Measure Proposed Revenue Measure 11 What is Measure G --the City of Palm Desert Public Safety, Roads, City Services Measure? The measure is being proposed to fund Palm Desert’s long-term finances and to maintain city services for our residents and businesses. It will increase the current sales tax by 1%, which is equal to one cent on every dollar spent on taxable goods. If passed, it will generate approximately $25 million each year in local funding to maintain Palm Desert City services including Public Safety, maintenance of streets, roads and other infrastructure, and other services maintained by the City’s General Fund. 12 “PALM DESERT PUBLIC SAFETY, ROADS, CITY SERVICES MEASURE. To maintain Palm Desert’s long-term finances, City services such as 911 emergency medical/police/fire response, fire protection, response to property crime/thefts, keeping public areas safe/clean, maintaining streets, roads, parks, youth/senior programs; retain/attract local businesses; and for general government use, shall the measure establishing a 1¢ sales tax generating approximately $25,000,000 annually until ended by voters, requiring public spending disclosure, funds controlled locally, be adopted?” Measure G –Ballot Language 13 Current Sales Tax Rates in Coachella Valley Cities. City Sales Tax Palm Springs 9.25% Cathedral City 8.75% Coachella 8.75% Indio 8.75% La Quinta 8.75% Desert Hot Springs 7.75% Indian Wells 7.75% Palm Desert 7.75% Rancho Mirage 7.75% Breakdown of Current Sales Tax 14 Current City Sales Tax Rate: 7.75% A Voter Approved One-Cent Local Measure Would Bring the City to an 8.75% rate, with 100% of new funds staying local in Palm Desert. 15 Potential New City Sales Tax Rate: 8.75% 16 •Most groceries •Prescriptions/many medical supplies •Medical/Dental Services •Rent/Real Estate •Utilities **No additional taxes would be levied on these items. Certain Purchases are Exempt from Sales Tax: 17 Revenue raised by the measure, estimated at $25 million per year, will stay in Palm Desert, and cannot be taken by the state, county, regional agencies, or special districts. The measure may be ended by voters at any time at a subsequent election. 70% of sales tax dollars collected in Palm Desert come from tourists and visitors from surrounding areas. Facts About Measure G: 18 What Would a 1 cent Increase Mean? $100 Shoes $1 increase $15 Laundry Detergent 15 cent increase 19 As part of the deliberations and development of this measure, the City Council adopted a 5-year Spending Priorities Plan. Spending Priorities PRIORITY -FIRE PREVENTION/EMERGENCY RESPONSE •Project #1: Fire Station 102 Construction and Staffing •Project #2: Fire Station 33 Rehabilitation •Project #3: Fire Station 71 Reconstruction PRIORITY -PUBLIC SAFETY •Project #1: Increase Public Safety Patrol Staffing (3) PRIORITY -INFRASTRUCTURE REPAIR AND EQUIPMENT REPLACEMENT •Project #1: North Sphere Flood Control Infrastructure and Emergency Plan •Project #2: North Sphere Public Works Staffing (3) 20 Spending Priorities PRIORITY -PARKS, RECREATION, AND LIBRARY EXPANSION •Project #1: Palm Desert Library Construction and Staffing •Project #2: North Sphere Regional Park and Staffing PRIORITY -FINANCIAL RESERVES •Project #1: Replenishment of Emergency and Operation Reserves More information on these priorities and the Measure itself can be found at www.palmdesert.gov/MeasureG Thank you! Questions? 21